Deciding two connected writ petitions arising from a common Industrial Tribunal Award, the Delhi High Court set aside the Tribunal's direction granting hotel workmen a further…
Labour Laws
06/09/20264 min read
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Informative
Disallowance of Related Party Payments u/s 40A(2)(b): ITAT Deletes Additions for AO’s Failure to Prove Excessiveness
Income Tax
The ITAT ruled against the disallowance of payments to related parties under Section 40A(2)(b), holding that the Assessing Officer failed to prove such payments were excessive or unreasonable. This reinforces the principle that the burden of proof lies with the tax department to establish excessive pricing. The verdict is significant for transactions among related parties, protecting legitimate commercial arrangements from arbitrary tax additions.
